6 Leading Integrators Merge to Form International Luxury Brand
With $73 million in combined revenues, six CE Pro 100-worthy dealers form VIA International, hoping to become the first international company for luxury home systems integration.
Six leading high-end integration firms – with expected revenues of $73 million for 2013—have merged to form VIA International, Inc., with plans to become the first international brand for luxury home systems installations.
The firms—all of which would qualify to be on the CE Pro 100 list if they chose to participate—are:
- Cyber Sound – Scottsdale, Ariz.
- DSI Entertainment – Los Angeles
- Engineered Environments – San Francisco, with offices in Hawaii and Houston (dba Forefront Innovations)
- Paragon Technology – Aspen, Colo.
- S3 Aurant – Park City, Utah
- Studio AV - Bozeman, Mon., with offices in Missoula, Mon., and Jackson, Wyo.
The near-term goal of VIA is to serve 50 U.S. markets within five years with combined revenues of more than $200 million.
Leading the group as CEO is EE founder and principal Randy Stearns, who tells CE Pro he has removed himself from the day-to-day operations of his integration company to take on this new role. Likewise, Paragon principal Brad Whitehead is working to transition himself out of the everyday operations of his company to serve as full-time COO of VIA. Business consultant Mark Hodges is chairman of the board.
“We’re all exchanging our shares and putting them into VIA,” says Stearns. “It is 100-percent owned by the original founders, which is particularly unique.”
Can VIA Succeed Where Others Failed?
This is not the first time a group of custom integrators have tried to capture the national market. In 2003, for example, EE was part of the much-hyped and short-lived Signature Media Group – mainly an effort of an outside investor to amass a collection of high-end integrators and eventually flip the group.
AT A GLANCE
- Market: Luxury home systems integration averaging $150k - $450k per job
- Revenues: 2012: $66M in 2012, $73M in 2013e
- Employees: 300
- Current markets: Arizona, California, Colorado, Hawaii, Montana, Texas, Utah, Wyoming
- Expansion goal: 50 markets in 5 years
- First expansion: East coast
- Revenue goals: > $200M in revenue, > 7% market share by 2016
- CEO: Randy Stearns, founder of Engineered Environments, former CEDIA president
In the case of Signature and others, the investors “want a piece of the pie and at the end of the day it requires outside funding,” says Stearns. “It’s a tough industry to get outside funding.”
VIA is different, Stearns says: “What’s important is that there’s no one from outside coming in.”
He adds that the group can fund its ambitious plans through its own profits. To fund larger acquisitions, Stearns says VIA might have a money-raising event in a year or two.
PREDICTION: VIA will Succeed
In selecting this group of market-leading firms, the new organization sought “mature business leaders, but people who still had a lot of energy,” says Stearns. “They didn’t want to cash out and move on. They had plenty of fuel in their tank and wanted to ride it out.”
Building a Dominant Luxury Brand
VIA’s charter is to serve “ultra-high net worth clients that include Hollywood’s A-list celebrities, sports superstars and Forbes 400 business tycoons, among others.”
Although VIA may eventually cater to a broader market, for now they’re sticking with what they know best: six- and seven-figure jobs.
“It’s a market we’ve all served for a long time,” says Stearns. “It’s what we know, the relationships we have. We don’t feel like we have captured any significant percentage of market share. By our calculations, even staying in this ultra high-end niche, we would only need a 15-percent market share to exceed our wildest dreams.”
Stearns need only point to the fact that many existing VIA clients have second and third homes.
Already the companies are “comparing client databases and seeing cross-selling opportunities that didn’t exist before.”
With a national footprint, VIA can serve as a single service provider no matter where their clients live, work or play.
The individual companies will be keeping their own identities for a short time and then transition completely to the VIA brand probably within a year.
But being a single provider is more than having a single brand. To succeed, the companies must implement best practices for all markets, unify financial and operational software, standardize vendors … and grow.
Julie Jacobson is founding editor of CE Pro, the leading media brand for the home-technology channel. She has covered the smart-home industry since 1994, long before there was much of an Internet, let alone an Internet of things. Currently she studies, speaks, writes and rabble-rouses in the areas of home automation, security, networked A/V, wellness-related technology, biophilic design, and the business of home technology. Julie majored in Economics at the University of Michigan, spent a year abroad at Cambridge University, and earned an MBA from the University of Texas at Austin. She is a recipient of the annual CTA TechHome Leadership Award, and a CEDIA Fellows honoree. A washed-up Ultimate Frisbee player, Julie currently resides in San Antonio, Texas and sometimes St. Paul, Minn. Follow on Twitter: @juliejacobson Email Julie at firstname.lastname@example.org
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